Working Paper: CEPR ID: DP9206
Authors: Christian A. L. Hilber; Frédéric Robert-Nicoud
Abstract: We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group via increasing property prices but hurt the latter via increasing development costs. In this setting, more desirable locations are more developed and, as a consequence of political economy forces, more regulated. These predictions are consistent with the patterns we uncover at the US metropolitan area level.
Keywords: housing supply; land ownership; land use regulations; zoning
JEL Codes: H7; Q15; R52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Owners of developed residential land support land use constraints (R52) | Property prices increase (R31) |
| Owners of undeveloped land oppose land use constraints (R52) | Rising development costs (O39) |
| Desirable locations are more developed (R33) | Tighter land use regulations (R52) |
| Urbanization leads to the spread of land use regulations (R52) | Regulations became more prevalent (L51) |